Instagram is a perfect example of how arrogance could re-define the 'image' of a company.

The real problem for Instagram was not about selling its users' photos. The real problem was being 'sneaky as fuck'. If you intend to sell our photos, we actually have no problem. You just have to make it clear to us. But what did Instagram do? Silently update it's terms of service WITHOUT informing its users. Legally, it's not obliged to do so, but when you have tons of data that THE USERS have uploaded, it is YOUR duty to tell us, atleast inform us before trying to sell it. This is what created that public outrage, because Instagram failed to notify any of its users of this change. You can't just walk in one fine day saying, "You know what? All the pictures YOU have taken effort getting it right, will be ours from today, and I guess it's best you don't know about it."

Well, fuck you Instagram, you deserved this. When I joined Instagram, I knew someday it would have to make money to sustain and most likely my data would be compromised (something an average user wouldn't realize and would assume it's forever free). Fitting ads somewhere inside your app or on your webpage would have been a much better solution, because it is something the average user would see (and possibly wouldn't mind either). But your sneaky as fuck change in TOS was UNETHICAL. You deserve this. I just hope some other open source app replaces you and your fame fades away. Because you are u.n.e.t.h.i.c.a.l.

This is a perfect example of how ignorance can lead to fear, uncertainty and doubt. It's also an example of how erroneous media can easily mislead the public.

Instagram was never going to "sell your photos." If you read the TOS, they were reserving the right to advertise against your photos much like how sponsored stories work on Facebook.

But advertising is so evil right? Time to give up Google Search, Gmail, Google Maps, LinkedIn, New York Times, etc.

Frankly, I find it funny that your everyday consumer is in an uproar because they think that their kissy-face photos could even be sold.

Companies like National Geographic whose businesses are built on the IP around their photos have legitimate reasons to be concerned in general. In this case, though, these changes would've allowed them to advertise their magazine on Instagram. Professional photographers may also want to protect their content from being used in advertising.

But 99% of users are every day people taking pictures of babies, dogs and the sunset...content that would almost never be "sold."

Also, the fine print on AppData shows that their method of measuring users is completely prone to error. Many other apps showed a drop off and FB made some algo changes around the same time.

>Instagram was never going to "sell your photos." If you read the TOS, they were reserving the right to advertise against your photos much like how sponsored stories work on Facebook.

Dude, are you Instagram's lawyer? How can you be so sure?? Either way, you still don't get the point. It wasn't about whether they were going to sell it or not. It was about they giving themselves the 'right' to automatically, possibly do so in the future.

Naturally, when you do something like this, especially with others' data, you could in the least inform them. Because it's their fucking content. When I joined facebook and orkut, I saw the ads on the side. I knew it was a compromise I had to make. So it really didn't matter to me.

That's why I still use Google. Because I know the company is trying to make money by letting me use it. With Instagram, when I joined it, there were no ads nor did they tell me or give me a hint that my photos would be 'sold'. An average user would have assumed it would remain free forever, but I knew they would somehow need to make money. But, they didn't express their intent to make money (through selling your photos) clearly because they knew if they did so, no one would join their service. Hence they basically deceived you into joining their service for free initially and one fine day gave themselves the rights to sell your photos. That's unethical. The problem here is I took the effort to get the photo right, but I am NOT compensated monetarily for my effort. Instead Instagram just benefits from it. So it's like a free photo sharing site first that is automatically turned into a stock photo site without your consent where you don't even get any benefits when your photo is sold. I'm sorry, that's unacceptable and that's unethical.

What the consumer owns is none of your business - be it
babies, dogs, sunset or even elephants. It's their will to do what they want with their phone's camera. And like I said, there's even nothing wrong with monetizing these photos as long as you express your intent clearly.

But show me one good example of a widely used Internet service that's owned by a public company that willingly cheated its users when it had the chance? Even Apple and Google have not done anything like that.

Also, the change in the TOS wasn't much different than it was before. They were just making it more clear as far as their intent to monetize by allowing your content to be sponsored.

The problem with your position is that its assuming that the company is trying to bait and switch you. It's not.

Google is no better or worse and thinking that they are is ignorance on your side that probably due to bias of media and the general tech community. Want to talk about bait and switch? What about Google Apps that used to be free for small businesses and is no longer? What about Gmail before ads? You can bet that its a matter of time before Google+ uses social ads and any location based service will use your location ads. Bait and switch?

It's ridiculous for you to complain that they didn't "express their intent to make money." Listen to yourself! Look at this site? It was a startup! Of course they want to make lone, as does every other for profit startup on Hacker News.

There's no deception. There's no unethical behavior.

Google benefits from serving content I've ceeated on its search engine by returning it as organic search result. Why am I not compensated?

Why does it not compensate sites like Wikipedia where their content and links are returned under their search engine?

>But show me one good example of a widely used Internet service that's owned by a public company that willingly cheated its users when it had the chance?

Do you know how many times Facebook has done this? Thanks for atleast demonstrating your ignorance, dude.

Are you affiliated to Instagram somehow? If yes, let's not waste both of our times (Atleast, I have none to lose to a troll)

Did you read my comment properly? The problem with you guys is you half-ass read everything before you comment. I mentioned I knew they WILL make money, but it's the average user's perception that they wouldn't do so. Either 1)You failed in your English classes or 2)You are mis-representing whatever I said, time and again.

>There's no deception. There's no unethical behavior.

Let's have it like this. I give you free canvas'es to paint on. And you create a dozen paintings. One fine day, you notice at the back of each canvas, there's a tiny print that says I have the right to sell these paintings as mine. I would love to see you not be upset about this.

When I gave you these free canvas'es, I never told you about these nor did these tiny prints exist. Of course your common sense must have told you there must be some catch. But this is too extreme of a catch. I gave such free canvas'es to a dozen people like you and they were just 'average users' who thought they are getting this canvas for free. And suddenly they realize I somehow sneakily printed in small letters that whatever the painting be on canvas is mine and I can fucking resell it under my name. The question is, if you knew of such a catch and if you were a passionate artist, would you have got these free canvas'es from me? If you say yes, then I can atleast confirm you are a troll arguing for fuck's sake.

>Take a step back and remove your bias. No ones out to get you.

It's not bias. That's the whole point. I feel so sorry for you though. I can send you some english books via FedEx for free (trust me, there are no catches here) so you can learn to understand english sentences in general.

Your assumption that these photos can not be sold is simply false. Maybe you specifically won't pay but i would. I pay for premium services when i need graphics. Think of an instagram api you can get access to and showcase pictures with tags x,y that are popular within your service.

"The language we proposed also raised question about whether your photos can be part of an advertisement. We do not have plans for anything like this and because of that we’re going to remove the language that raised the question"

They admit right there that the TOS allowed for brands to feature user photos in ads. It's a nice cover to claim you never intended that, then if so why put it in TOS? Maybe the legal department got carried away, but more likely they envisioned photos being like Facebook "likes" (e.g., "Joe Adams likes Amazon!"). You might have Amazon promoting a user image of someone reading a Kindle on Instagram.

Whether they were going to sell the photos or not wasn't the issue, they just gave themselves the 'right' or 'possibility' to do so without anyone's consent.

Either way, let me give you an analogy - You catch a someone red-handed trying to steal your belongings from your house. If you asked him what was he doing there, he's obviously going to defend himself. He would say anything but 'I'm here to steal your stuff.' In this case the burglar just said he's here for a cup of coffee, which to me seems too good to be true.

I think you're agreeing with OP. The problem was never rooted in selling photos, the problem was Instagram's arrogance and willingness to sneak changes into the TOS without talking to the users. The changes themselves maybe didn't matter so much in this case as did their inability to communicate.

Ok. You can start by properly reading the link you posted. Here's the opening line:

"Yesterday we introduced a new version of our Privacy Policy and Terms of Service that will take effect in thirty days. These two documents help communicate as clearly as possible our relationship with the users of Instagram so you understand how your data will be used..." Key words: "These two documents help communicate AS CLEARLY AS POSSIBLE."

Scroll down another three inches, and you'll find this gem: "Legal documents are easy to misinterpret."

Well no shit. Privacy Policies and ToS agreements are notoriously opaque. But here's what's even harder to understand: a person who (correctly) thinks that documents like these are "easy to misinterpret" nevertheless asserts that they "help communicate as clearly as possible", and does so at the top of a blog post that is supposed to do what? Communicate MORE clearly than possible?

Maybe all this can simply be chalked up to bad communication skills, a general lack of self-awareness, and a weak grasp of academic basics like logic and English. But most people don't regard freshly minted billionaires as idiots, and refuse to give them the benefit of the doubt. That's twice as true when the billion dollars come from someone who is widely seen as untrustworthy.

"... it was interpreted by many that we were going to sell your photos to others without any compensation. This is not true and it is our mistake that this language is confusing. To be clear: it is not our intention to sell your photos. We are working on updated language in the terms to make sure this is clear."

and this:

"The language we proposed also raised question about whether your photos can be part of an advertisement. We do not have plans for anything like this and because of that we’re going to remove the language that raised the question."

So it sounds like they never wanted to sell people's photos, or use them in advertisements. (which is what the major complaint was, right?)

Maybe, maybe not. We're simply taking them at their word. For all anyone outside the company knows, this was a stealth move designed to see how far the TOS could be pushed before the company decided what, exactly, they were going to do within whatever parameters they could get away with. After all, the real issue with becoming part of Facebook for $1 billion is that Instagram is reasonably assumed to be hard pressed to justify their price in a corporate structure famous for its own uncertain prospects and notorious lack of scruples.

The other problem is that even now, they're still bullshitting, and indirectly blaming users for the fuss. In truth, there was nothing unclear or confusing about the language they used. To the contrary, it was explicitly clear. And what it said was awful. Even if the message conveyed wasn't what they intended, it's dishonest to to characterize the resulting uproar as "confusion". That wasn't confusion. That was justified fury aimed at a richly deserving target.

Even now, they're still remain very unclear on the concepts of respect, integrity, and honesty. What they should have said was not "Thank you" (as if people's rage is a favor gladly bestowed), and "Hey, we're listening", (as if there was any doubt when their entire brand was headed for a cliff.) This is just more patronizing nonsense, which only exacerbates the mushrooming trust issue they've got on their hands.

Instead, they should have said, in big bold letters at the very top "We're really Sorry! We just published something truly awful. In no way does it reflect our intentions, but none of you had any way of knowing that, so if we were in your position, we'd be just as furious as you are. Again, we screwed up the ToS - badly. We're scrapping that effort entirely. Please accept our very humble apologies. "

Continuing, the should have noted "And that's not the only thing we screwed up. By failing to share our plans for the company with the community we rely on - in plain English, clearly, and up front - we left you no choice but to assume the worst when our train-wreck of a ToS update hit the internet. Furthermore, we've failed to account for the residual trust issues that our new owners at Facebook developed in their rapid growth phase, and which they are still dealing with today. We are now aware that we're a part of putting those concerns to rest, which means being especially careful with things like Privacy and IP. As noted, we weren't. Please believe us when we say that we've learned these lessons hard and fast, and that none of these problems will be problems again."

At that point, they could do what they should have done from the very beginning, and clearly explain the (hopefully) non-abusive, non-sleazy way they intended to build a commercial service to the IP holders they rely on.

We may never know. There was so much backlash against their TOS changes they had to walk them back. And even if their original intent was to sell their users' images for use in ads then it would be in their interest to claim otherwise and pretend it was just a misunderstanding.

Making a judgement on the basis of two datapoints for weekly data where one of the weeks is a major holiday in the biggest relevant markets strikes me as a bad idea. Unless you can use previous years seasonality to adjust the data.

It may be that Instagram would normally have an increase rather than a decrease at Christmas but I wouldn't assume that without data.

The question Instragram has to answer for themselves is, is losing these users a bad thing? It's an obvious answer, do you want 16 million users who aren't making you a dime, or 12 million users who are able to be monetized?

Even if it dropped to one million, one million users making you money is arguably better than any number of users who aren't making you money if you're running a business.

Sure, it's a bad (or at least unwelcome) thing...one of a social network's primary currencies is the network effect that entices more and more people to make it an essential part of their online lives. Every millon users, even if they're all dead beats, is more leverage to convince big companies who will pay you to join into your ecosystem.

The network effect is nice, but money is nicer - especially if you were just bought for $1b by the epitome of the network effect. Instagram needs something to sell in order for companies to be willing to pay to join them, and what can they offer but the personal information of their users?

Yeah, I really got the feeling that SV had finally jumped the shark when Instagram got sold for $1 billion. How can a service with users, but no clear revenue stream, be valued so highly? It seems like people have gotten too caught up in navel (and traffic stats) gazing to see what's really important when running a business.

> And what kind of revenue does that feature bring in exactly? How exactly does Facebook profit from providing free photo hosting to a billion people?

The "goal" of facebook is for you to share and connected with your friends. Photos are just one of the things everyone wants to share. Without it, Facebook would have a giant hole for a competitor to attack.

Facebook profits by having the most active and connected users. It's not necessary to make money from each feature. That's extremely short sighted.

Which is correct. Google provides search functionality, but makes its money from advertising.

But what feature exactly is Facebook making money off of? They seem to still be scrambling to find a revenue source. I don't understand how this situation is at all acceptable from the investors' viewpoint. That is why I say that SV has jumped the shark.

Exactly. This is the poster child for "acquihires" in that it was a defensive move to get Instagram user mind share encapsulated into face books properties and an offensive move to prevent any competitors from acquiring the user base's attention.

While it may not have "inherent" value, it certainly has value. The attention of a user base can be extremely valuable if effective advertising is used. The majority of Google's revenue comes from advertising, and no one would claim they are not a viable business. Facebook is now making a non-trivial amount of money from advertising as well.

> The majority of Google's revenue comes from advertising, and no one would claim they are not a viable business.

Google is the exception. Or rather, search is the exception. You can make money off of search advertising because people are explicitly looking for things when they perform a web search. So if you show people good ads, they will click on them.

But how many people are going to click on ads when they're trying to connect with their friends on Facebook? Facebook's entire premise with respect to advertising is that they have more information about the user, so they can target ads better. But it doesn't matter how targeted an ad is if the user isn't interested on clicking on it when it's presented.

> Facebook is now making a non-trivial amount of money from advertising as well.

There's a big difference between "non-trivial" and "enough to turn a profit".

> I don't agree at all. If the users attention had no value, then you would not see 800 million users on facebook.

I don't see how the value of the users' attention determines whether or not they are on the service. If you put out free food on the street, people will come and eat it, and you will have their attention. Doesn't mean you can turn a profit doing that.

> Google+ and FB are in direct competition for the attention of the same users.

Yes, they are, but I have yet to see "user attention" be properly monetized on a large by anything other than search engine advertising. Facebook is still trying to find solid revenue sources. Their new gifts platform is the latest example of this.

People forget how well connected Systrom and Instagram were/are. Systrom worked at early Twitter, worked at Google, close with people at Facebook, and seeded by Andreessen ($75mil off a $250K investment). At the end of the day, it's about people. The speed of the transaction helped too.

Well the point I was making was that if by monetizing your userbase you're going to lose some of your userbase, it's still better to monetize a smaller userbase than to have a large userbase with no cash inflow.

Were there other options available to them that wouldn't have lost users? Possibly. I have no stats to back it up other than personal experience, but I would venture to say that no matter how you monetize your userbase, there's always going to be some people who expect it for free, no strings attached, and will cause a stink then leave if there's any monetizable component to it.

I've been there myself and its a helluva slippery slope. When you're a start up growth is everything so losing 25% of your uniques is terrible BUT... They've already been acquired so now for Facebook to lost 25% of instagrams uniques... You may have a point.

However how many are already Facebook users and thus already profitable?

all i know is that before i deleted my account, around 15 close friends deleted theirs. We are not teenagers, but adults with well-paid jobs - i.e. the sweet-spot target demographic for most big ad-spending brands.

It was over the TOS but that doesn't mean that they left because they didn't want to be monetized. They were unhappy with the way that Instagram went about it.

If Instagram notified users of a change of TOS and clearly stated that the scheme would be opt-in and perhaps offer a mechanism where users could get a cut of the revenue obtained through the use of photos that they specifically flagged for commercial use, media coverage would have been completely different and I doubt that many users would leave in this scenario (or other more user friendly scenarios).

I deleted the one photo in my profile and all my likes - and cleaned up in the accounts I followed - but I'll still see if I can write a personal client that fetches the photos of people I am following and stores any "likes" in my own database.

After that - or before, if Instagram insist on changing their rules - I'll probably delete it altogether.

This goes on to show that people actually do care about these issues. The problem is that generally people aren't aware of the terms they're agreeing to unless someone breaks down what the TOC actually means, or what the consequences could be.

It's too early to tell if this is good data or not. Assuming it is it begs the question. Why would Instragram's Users (a major % of them) act in a way we've never seen when other SN's pull similar moves? What's so unique about Instagram vs FB and is their any broader lesson to be learned from that?

As far as I can tell, it's all about selling peoples' pictures versus using them to leverage targeted ads. I don't think most Instagram users ever thought about how the service would be monetized, but I think even the ones that did assumed it would just be ads like FB, etc. But taking someone's pictures and selling them is a whole different ball game.

I'm one nerd, and I know a solid two hundred plus people in real life that asked me what the Instagram thing was all about because they had heard about some stuff and needed clarification. I won't run through what I talked to them about but I can assure you, it is not just nerds and geeks that care about this stuff. The key difference why I got 200+ people IRL asking me questions about Instagram? Because I am patient and can explain things in layman's terms. Non-technical people won't ever ask someone that assumes they don't want to know these things questions regarding these things.

Dude you just assumed on me. I just dislike when people post bogus articles like this on hacker news. Completely unfounded data. You assumed this data was because of the TOS and so did CNBC to get more page hits. Yes I asked many people who didn't ask me, and they didn't think much of it.

Too bad something like that never happened to Facebook itself whenever they pushed for their more aggressive default privacy settings. Maybe that would've forced them to reconsider a little and have more reasonable default privacy settings.